Radagast is one of the problems I have with the new Hobbit series. He is mentioned as being rather inept compared to Gandalf, but why he's suddenly the Jar Jar of the prequels is lost on me.
The Hobbit - what a disappointing movie.
I am Gandalf the Grey of the Council of Eldars, servant of the secret fire, guardian of Anor, and my favorite command is,
"Run!"
Perhaps a more serious Radagast possesed by the disembodied essence of Gandalf could be an interesting character. Portrayed as something of a trickster who is morally gray and less powerful than Saruman, I could see a lot of plot choices through dialogue occurring involving whether or not the good guys can trust him.
The fundamental problem, IMO, was that Tolkien could never make up his mind about just how powerful wizards actually were. In one scene, Gandalf is beating feet in Moria just to outrun some orcs. In another, at the gates of Minas Turith he's about to pursue the Witch King straight into the center of the enemy army. Did the 'white' promotion really bling him up
that much?
But to answer the OP, I think an I replaced Gandalf who remains dead adds some emotional bottom and some gravity greater than OTL's version and the impact on later works could be immense.
The best answer, IMO, was simply not to have killed GtG in the first place. He falls, he gets up, he kicks some Balrog ass.
IMO, the character that should have died was Sam, on Mount Doom. That was the literary device to carry the story, to show why Frodo tired of the world and had to pass over the sea.